Total Energy Services Inc.
TSX : TOT

Total Energy Services Inc.

April 17, 2015 16:55 ET

Total Energy Services Inc. Announces Redemption of Convertible Debentures and Increased Bank Credit Facilities

CALGARY, ALBERTA--(Marketwired - April 17, 2015) - Total Energy Services Inc. ("Total") (TSX:TOT) announces that it has exercised its right to redeem all outstanding 5.75% Convertible Unsecured Subordinated Debentures maturing on March 31, 2016 (the "Debentures") in accordance with the terms of the trust indenture dated February 9, 2011 governing the Debentures. The Debentures are listed and trade on the TSX under the symbol "TOT.DB" and the aggregate principal amount of Debentures outstanding is $69.0 million.

The redemption of the Debentures will be effective on May 19, 2015 (the "Redemption Date"). Upon redemption, Total will pay to the holders of the Debentures $1007.72 per $1,000 principal amount of Debentures held less any taxes required to be deducted or withheld, which is equal to the outstanding principal amount of the Debentures plus accrued and unpaid interest thereon up to, but excluding, the Redemption Date.

In connection with the redemption of the Debentures, Total is pleased to announce that it has secured a new $50 million term bank loan (the "Term Loan") and has increased its existing revolving credit facility from $35 million to $65 million (the "Operating Facility"). Both credit facilities are with Total's primary bank, HSBC Bank Canada. Drawdown of the Term Loan is subject to satisfaction of customary conditions precedent.

The Term Loan will be a five year term loan amortized over 20 years with blended monthly principal and interest payments. The Term Loan will bear a fixed interest rate based on benchmark interest rates in effect at the time such loan is drawn, with the current applicable rate being approximately 3.0%. The Term Loan will be secured by certain of Total's real estate assets. Total recently received an independent third party report indicating the current market value of its real estate holdings to be approximately $110 million. At December 31, 2014, the net book value of such real estate holdings was $49.9 million.

With the exception of increasing the borrowing limit, the terms and conditions of the Operating Facility have not changed from those in place when the Operating Facility was recently renewed to February 2017. The Operating Facility is secured by inventory and accounts receivables, is subject to standard margin requirements and is currently fully available and undrawn.

With the exception of real estate assets that will be pledged as security for the Term Loan, all of Total's capital assets are free and clear of encumbrances and are available to support future debt financings as might be required.

Total is a growth oriented energy services corporation involved in contract drilling services, rentals and transportation services and the fabrication, sale, rental and servicing of natural gas compression and process equipment. The common shares of Total are listed and trade on the TSX under the symbol "TOT".

The Toronto Stock Exchange has neither approved nor disapproved of the information contained herein.

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